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Sage 50 year end close checklist – Sage 50 allows you to keep two years of your company’s information open at one time. For those of you running in batch mode post all journals and then simply run the Year end Wizard which will also prompt you to perform a backup.
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What are the Sage 50 Year End Steps?
Sage 50 year end close checklist starts with the question “Is my Sage 50 accounting software system in balance?”
It is very important to reconcile your Sage 50 Accounting system before you begin a year end close and have a usable company backup. Once you begin recording activity in the newly created year there is no easy way to reopen a closed year if you were not really ready to close. We also recommend you are working in period 24 before you begin to close out the previous year and open up the next batch of 12 months for the upcoming year.
Most small businesses balance each month. During this process if you find that something not in balance is is easier to discover the discrepancy. Once you have verify all is well with your Sage 50 Accounting financial balances print all year end reports to PDF. This will help you begin to build a repository of historical reports. Most businesses have a secured folder that is placed on a network server. We are asked a lot how do I change my fiscal year end on Sage 50 and there is a manual process should you need to do this.
How do I know? These are the basics steps on how to Measure your accounting system balances
If you are using an accrual accounting method, follow these simple steps each month to confirm your key balances are ok.
Step 1. General Ledger – Financials
Print the General Ledger Trial Balance using the last day of month once all activity for the month has been entered.
Step 2. Accounts Receivable – Customers
Print the Customer Aged Receivables Report – a detail list of how much your customers owe your business.
The Accounts Receivable general ledger account balance found on the General Ledger Trial Balance should = the total amount due found on the Aged Receivables Report
Step 3. Accounts Payable – Vendors
Print the Vendor Aged Payables Report – a detail list of how much you owe other businesses or individuals
The Accounts Payable general ledger account balance found on the General Ledger Trial Balance should = the total amount due found on the Aged Payables Report
Step 4. Inventory – Items list
Print the last page of the inventory valuation report – a detail list of the items you have in your warehouse and their value.
The Inventory general ledger account balance found in the General Ledger Trial Balance should = the total inventory valuation amount found on the Inventory Validation Report
Step 5. Payroll – Employee data
If your company calendar year is January to December, then print the year to date payroll earnings report or get it from your payroll service provider.
The Payroll Amounts for Salary and Wages Accounts found on the General Ledger Trial Balance should = The total YTD Gross on the Yearly Earnings Report
Step 6. Bank Statements
Perform your monthly bank reconciliation – when completed it should agree to the available cash balance in your checkbook.
The Cash Accounts general ledger balances found on the General Ledger Trial Balance should = the reconciled checkbook balance once the bank reconciliation has been completed.
Sage 50 Year End Close Checklist
Consider adding these items to your month end close and at year end
- Write off bad debts
- Review and close unwanted purchase orders
- Preview and close unwanted sales orders
- Issue 1099’s to vendors
- Print W2’s
- PDF copies of YTD payroll reports
- Perform a physical inventory count
- Consider online accounting software
- And there may be more…
What if I am a cash based business?
Then the bank reconciliation is a critical step so you confirm all the money you are spending has been recorded and all the money you are being paid and have deposited has been recorded.
What else do I need to consider?
There may be many more steps that need to be completed each month. A month end checklist is important to help you make sure necessary tasks are being completed each month.
‘What if my accounting system is not in balance after I complete my month end close checklist?
If you find discrepancies on any of these steps it might be time to speak with your CPA, bookkeeper or find a local accounting software consultant to find the root cause. Make corrections to how your system is setup and give counsel to how to properly record the transactions. Software Training. If you would like a demo on the most current versions of Sage 50 Accounting by Sage Software give us a call 800.475.1047.
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